“A happy worker is a productive worker” might sound like an overly simplistic maxim, but that does not make it invalid. Various business theoreticians, coaches, educators, “experts” and authors have explored the concept of employee wellness, realized its complexity and potential, and linked it to corporate sustainability and long-term success. Since the scope of workplace wellness (and general well-being) is so vast, employers are often left puzzled when deciding where to start and which areas to tackle.

Saw a habit, reap a character

In his seminal work, The 7 Habits of Highly Effective People, Stephen Covey discussed not only personal achievement, but character building as well. The influential Dr. Covey argued passionately that one needs to preserve and enhance oneself first, and that personal renewal takes time and dedication. It is also essential to the implementation of the other proposed habits (Covey, 1989). In other words, looking after your physical, social/emotional, mental and spiritual well-being (Covey’s four “self-renewal” areas) is his crucial 7th habit in the architected algorithm of business and personal success.

The concept of self-renewal goes well beyond simply “not being ill”. It is about finding the equilibrium that will enable one to live well, handle challenges (resilience), and produce great results (productivity).

Employees’ basic needs

Tony Schwartz, the chief executive of The Energy Project, a consulting firm, echoes some of Dr. Covey’s beliefs, too. His work involves propagating systemic investment in employees, beyond just paying them a salary, and meeting the complex needs of the workforce that will in turn perform better. Mr. Schwartz elaborates on Covey’s work by identifying four basic needs that should be met if a company wants its workers to be more satisfied and more productive:

Renewal (physical needs)

Value (emotional needs)

Focus (mental needs)

Purpose (spiritual needs)

In short, if workers are supported to reenergize (e.g. take regular breaks), feel valued and appreciated, are able to focus on the task at hand, and believe there is a higher purpose to what they are doing (something bigger than them), they will perform significantly better, as demonstrated in a study conducted by The Energy Project for the Harvard Business Review (Schwartz & Porath, 2014).

Moving towards a definition of wellness

A more holistic approach towards workplace wellness might be catching on, but a uniform definition of wellness has yet to emerge, which can make certain initiatives and programs seem trivial. For example, while some might consider giving employees intermittent breaks to be a way of promoting balance and personal renewal, critics might argue the value and significance of such in-direct strategies for business success.

Twenty years ago, Anspaugh, Hunter and Molsley (1995) captured the wellness’ multi-dimensional character and the implications for contemporary wellness programs when they coined the following definition of wellness:

A composite of physical, emotional, spiritual, intellectual, occupational, and social health; health promotion is the means to achieve wellness. Difficulty functioning in any of these areas has a negative impact on the others. For this reason, a comprehensive worksite health promotion program needs to address each of these issues (p. 206).

The notion that wellness expands beyond the absence of illness and disease is far from a new idea. Even earlier, in 1976, Dr. Bill Hettler talked of a six dimensional wellness model; the physical component being just one of six parts of his wellness wheel (National Wellness Institute). Nonetheless, some dimensions of Hettler’s model often stay ignored, and the more bio-medical view still takes the lead, sometimes obstructing progressive approaches to health, wellness and overall success by giving priority to the reductionist corporeal view.

What stands in the way of launching ‘holistic wellness’ strategies?

Often, habits and deeply ingrained patterns of (corporate) behavior stand in the way of meeting employee needs such as those described and researched by Covey, Schwartz and their colleagues. Despite a growing evidence base that supports employee satisfaction as a component of well-being, in many companies, old paradigms persist (Schwartz & Porath, 2014). However, employers seem to be increasingly recognizing the complex needs of their workers. In fact, it could simply be that the complexity of these needs makes the task of satisfying them more daunting.

Addressing the physical aspects of well-being appears to be somewhat the easiest jumping-off point, and many wellness programs focus on these (alone) perhaps because they are easy to quantify. A broader shift in corporate mind-set that would consider other (less tangible) needs is less common.

Are we sometimes limiting ourselves to the physical dimensions of health when designing and promoting wellness programs? Is that the reason that workers’ performance and participation doesn’t improve as much as we in the industry would hope? In order to embrace everything wellness stands for, more energy needs to be dedicated to exploring different areas of general employee satisfaction. Ideas such as promoting healthy work relationships, providing a sense of belonging and value, listening, and encouraging life balance are important -especially to millennials (Harter, Schmidt, & Keyes, 2002, Towers Watson 2012 Global Workforce Study). In many ways, meeting employees’ needs – physical and non-corporeal – is what workplace wellness represents, and when executed well, it is bound to result in both a happier workplace and improved productivity.

This is a recent NPR clip about the current state of workplace wellness. It’s a pretty good summary of the current state of affairs so I wanted to post it. The transcript of the audio is below.

Most medium to large employers offer some sort of wellness program for their workers. That can range from health screenings, to weight loss, and smoking cessation programs. Many employees like these options, and employers like that they can help hold down health insurance cost. But, there are legal questions about how far employers can go to encourage participation. NPR’s Yuki Noguchi has the story.

Yuki Noguchi: Scott’s Miracle Grow makes products for the care and health of lawns. The Marysville, Ohio company says it wants to nurture its 8,000 employees the same way.

Jim King: It’s very much of a family culture here.

Yuki Noguchi: Jim King is a spokesman for the Scott’s company, which offers discounted prescriptions, annual health screenings, and some free medical care. In states where it’s legal, it refuses to hire people who smoke.

Jim King: We’ve been screening for tobacco use for about a decade. We no longer employ tobacco users.

Yuki Noguchi: That provision landed the company in court several years ago. A new hire failed a urine test for nicotine, lost his job offer, and sued the company arguing it was meddling in private affairs in order to drive down costs. He lost on appeal in 2012. About 80% of Scott’s employees submit to health screenings, and those who make unhealthy choices pay more for health insurance. King says Scott’s wellness policy attracted outside scrutiny, but employees embrace it.

Jim King: Once people understood what the program actually was, they recognized that it wasn’t anything like Big Brother at all. In fact, what we were doing was providing them tools.

Yuki Noguchi: Participation in the wellness program at Scott’s is not mandatory. In fact, under the law, such programs must be voluntary. But, regulators are now trying to define what voluntary means. Some hospitals require their workers get flu shots, which is controversial among those who can’t or don’t want to get vaccines. Beyond that, there are questions about money. For example, is a big financial penalty for non-participation too coercive? What about incentives for completing health screenings? Nico Pronk is Chief Science Officer at HealthPartners, a hospital system. He researches the effectiveness of wellness programs and says their design matters. He says incentives can work, but you have to be careful not to overdo it.

Nico Pronk: Once the incentives amounts go over a certain threshold, it may become a little bit more coercive.

Yuki Noguchi: Last year, the Equal Employment Opportunity Commission sued several companies, alleging their policies were too heavy handed. They argued those companies required health screenings or made non-participants bear the full cost of health insurance. Christopher Krysinksi is Associate Legal Counsel at the EEOC. He notes that, in a separate proceeding, the Commission is considering regulations to define what companies are allowed to do to encourage participation in wellness programs.

Christopher Krysinski: Limited incentives are permissible as long as the maximum incentive for participating doesn’t exceed 30% of the total cost of coverage.

Yuki Noguchi: Krysinski says employers must make sure that programs comply with many laws, including health and genetic information privacy, the Affordable Care Act, and the Americans with Disabilities Act. Employers can’t use a worker’s health against them.

Christopher Krysinski: There are opportunities for discrimination. This information that’s collected as part of a wellness program can’t crossover to anyone who deals with making employment decisions.

Yuki Noguchi: Business groups say they are striking a balance between encouraging participation and protecting the choice of their workers. Brian Marcotte is President and CEO of National Business Group on Health, a policy group representing large employers. He says most health care costs are lifestyle related and employers want to reduce costs. But, that’s not the only calculation companies are making.

Brian Marcotte: At the end of the day, employers want healthy, productive, engaged, resilient employees in the most competitive workforce possible. And investments in health and well-being are part of that equation.

Yuki Noguchi: Nancy Hammer is Government Affair’s Counsel for the Society for Human Resource Management. She says employers want to draw in, not compel workers.

Nancy Hammer: Health care and wellness is an employee benefit. So, you got to do something that is attractive to your employees.

Yuki Noguchi: No one benefits, she says, if no one uses the programs. Yuki Noguchi, NPR News, Washington.

Given my success as a marketer, getting one to buy something they might not (know they) need or that they might consider a luxury is second nature. When it comes to wellness programs, much has already been written about companies advertising the positive return on wellness – different numbers are consistently tossed around: from a ROI estimate of about $3 for every dollar spent to humbler claims of $1.65 saved for every dollar invested (Naydeck et al., 2008). Until recently, these research findings were generously and unquestionably provided to clients to make them feel confident about their investment in workplace wellness (by using quantifiable data that substantiated the managers’ decisions to invest in the program).

Researcher and participant bias

An undeniable concern of wellness program assessments is that they are often performed by the consultants who advocate them. Therefore, if a particular program is evaluated as ineffective, this could lead to the loss of a client or a job (Lewis & Khanna, 2013).

Another bias has to do with the selection of research participants: employees who opt-in to workplace wellness willingly are generally a group of volunteers who are already motivated to engage. The control group, on the other hand, is usually comprised of disproportionate amount of people who decided not to take part in the program, so in comparison, this group could be considered less motivated to improve their health (Lewis & Khanna, 2013). Since motivation is the key factor when it comes to changing health-related behaviors, having a group of motivated people compared to a group of (potentially) non-motivated people becomes highly questionable in terms of research validity, and certainly a methodological limitation.

Those who shout the loudest are not necessarily in the biggest trouble

A recent critique of workplace wellness programs has been that they provide for employees who do not really need them and who would likely lead a healthy lifestyle with or without these initiatives. People who might be at higher risk (smokers, the obese) are less likely to be drawn in – instead merely serving as a control group that positions the program as viable.

However, non-participants are more than just a methodological glitch. They also embody the industry’s challenge to engage people who could arguably benefit most from health promotion – if only we could sway them to participate in the programs wholeheartedly and continuously.

Why doesn’t more of the workforce participate?

Critics of workplace wellness such as Lewis and Khanna (2013) argue if wellness programs do so much in terms of health improvement and save both employers and employees’ money, how come not everybody is jumping onboard?

Barb Hendrickson (2013) explored some of the reasons employees choose not to participate in sponsored wellness programs. The explanations ranged from not being interested in improving health (ex. smokers usually know that smoking is bad for them) to not trusting the company’s intentions regarding the handling of their health data.

More often than not, workers opt-out due to their established believes (about health, the company, the management’s motivations, etc.) and/or because deeply rooted behaviors take more than a health questionnaire and a health club membership to alter.

The twofold question

How do we make the non-participants participate?

Workplace wellness providers often focus their efforts on those who are willing to participate. This is likely because strategies to engage those who lack motivation are more difficult to execute. Arguably, engaged participants are prone to change their risky behavior with or without the extra support and are internally motivated to do so anyway. It is the not so eager ones who are often exposed to higher health risks and could benefit most from good health initiatives.

How do we build a stronger evidence-base for wellness programs?

When conducting studies, it is possible to employ a somewhat less biased participant selection, as demonstrated by Naydeck and colleagues (2008). In their study, participants and non-participants were carefully matched on a variety of factors that are known to contribute to health cost such as gender, age, total medical expenditure for one year, evidence of heart disease and diabetes, and scores on the Charlson Comorbidity Index (which predicts mortality, stroke, the presence of some health conditions, and the length of hospital stay).

Through research and civil discourse, these two questions can get answered. As we continue to get a better understanding of participants’ motivation – one of the key factors for success in improving health – we in the field need to ensure we consult other disciplines such as behavioral psychology, social psychology, environmental engineering, nutrition, and also employ novel/less conventional methods of assessments that can capture this complex phenomenon. Furthermore, the concept of cultivating a culture of wellness within organizations needs to be further explored. Otherwise, wellness programs will remain primarily activity-based and participation rates in the long-term will remain flat.

What can we change as organizations? How can we change it? How as employers can we best make sure that we are encouraging individuals to make movement in the right direction? What are the key components?

Key Components of a Wellness Program

Measurement

Years ago before wellness was part of our everyday vernacular, corporate wellness was basically simply the health risk assessment (HRA). The University of Michigan now has over 25 years of data to support the fact that there is value in doing health risk assessments. Although it has its critics, it is really a standard part of workplace wellness in terms of health management. The value is not just in the report an individual gets back, basically their health report card. It is also in the aggregate data the organization receives. That is why the HRA is an important component of designing wellness programs and measuring ROI, because that aggregated data has documented validity a can provide organizations change in their programs’ key performance indicators (KPIs) year over year.

Biometrics are another great source, whether you choose to provide access through onsite programs or offsite preventative screening through your benefit plan, biometric data is great because it is objective. We generally know this information is fairly accurate and we can look at it on a population basis. Also, it is arguably one of the strongest ways to quantitatively see the impact of behavior change components of workplace wellness programs.

Are we making any kind of change in BMI?

Are we making a change in blood pressure rates?

Are making a change in the total cholesterol and the blood glucose rates?

All of these questions are important in terms of managing overall health and the likelihood of developing chronic conditions. As employers concerned about the efficiency of our workplace wellness program, these question are also incredibly important to consider when looking at the health of our employee population.

Behavior Change

The second component to critical examine is behavior change. If we aren’t changing anything, how do we expect to get a return on our investment? That is really where behavior change becomes important. Those particular pieces of the program that result in people modifying their lifestyle risks. Behavior change is really just a fancy way of saying: getting people to quit smoking, moving more and eating better.

We all know that we should do these things. The challenge is knowledge alone is not an enough. That is where wellness programs can really shine, in terms of the way they can get employees to engage.

Engagement Strategy

Lastly, the engagement strategy. This is the unsexy part of wellness, but it is one of the most important parts. Employers often have an aversion to having to invest in employees to be healthy, and engagement strategies defer this by attempting to intrinsically motivate and extrinsically reward an organization’s workforce. The practice of paying an employee to fill out a health risk assessment is antiquated. The process is only 10 minutes of work, and the measurement instrument alone really does not result in anything. A better approach is somehow using your incentives and linking them to some sort of health expenditure. This increases the employee’s participation in funding their own healthcare.

A big part of engagement is also effective communication. Typically you are going to have to message an employee multiple times to get through to them, even if you are a very sophisticated employer with good communication channels. Putting one article up on an Intranet is really not going to be enough to move your wellness program forward. You need to have a varied, yet comprehensive, communication campaign. Never underestimate the power of word of mouth as well. Getting wellness champions embedded in an organization’s environment is key, since leadership is an important element of effective communication. This also highlights the importance of company culture. If you have ginormous cookies available at every big meeting as the company’s snack of choice it really sends a very mixed message regarding how health is viewed within the organization.

Value-based Benefit Design

Value-based benefit design is a way to look at incentivizing or engaging employees and wellness programs. Rewards and incentives are tied to HRA and/or biometric data, and this becomes compulsory (by the employee) in order to have access to preferred health plan options. Within this paradigm there is a heavy focus on outcome, so you have baseline data HRA and/or biometric data for an individual for things such as blood pressure, cholesterol, BMI and blood glucose. If the employee is at acceptable measures they are rewarded with incentives. If they do not meet those standards (ex. they have an elevated BMI or their cholesterol is non-optimal) they are given an opportunity to engage in some kind of behavior change component. Rewarding the behavior change intervention is a way to incentivize healthy behavior despite the fact that the employee did not meet initial healthy criteria and then would be eligible for a premium differential through the intervention. The goal being that the employee would start to make lifestyle changes that would get themselves into an optimal range for the biometric measures that are associated with the development of chronic conditions.

Workplace wellness use to talk about carrots and sticks. Now we talk about value-based benefit design. This is a much more understandable and transparent way of engaging folks in wellness, especially when the employee is confident that as an employer you are never going to see someone’s individual data without the consent of the employee. And letting the employee know, giving them a chance to be in charge of their own wellness is important.

Important Program Elements to Track

What should you be tracking when you look at this information? You are really trying to implement at a very basic level some kind of behavior change initiative(s) around lifestyle risks. This is important not to forget when an organization is developing its program. It sounds somewhat simplistic when you say organizations just need people to basically start doing healthy things, but it is getting people to do healthy things that is the hard part. Seventy-five percent of our healthcare costs (as estimated by the CDC) are related to the things that we can change, mainly smoking and obesity. So tracking and helping an employee improve has a real impact, on the employee and healthcare costs. Since each organization and employee base is different, good benchmarks are important. That means getting health risk assessment data and biometric data specific to your organization so you know where you stand in terms of BMI, blood pressure, blood glucose, and cholesterol. Measuring the productivity of employees and impact on productivity is also important. An organization should also track the impact on medical claims. The estimate commonly cited is that 25 to 40 percent of these claim costs are avoidable – either through prevention, early detection, or physical activity.

What health risks impact employee productivity?

Typically productivity correlates with BMI, high cholesterol, blood glucose, high blood pressure, smoking and low activity. Blood pressure has a couple of statistics that support this. An incredible number of people actually have high blood pressure, yet it is one of the least compliant medications. Employees that keep their blood pressure within a healthy range decreases their risk for strokes, cardiovascular disease, heart attacks, and other very costly chronic conditions as well. About 31 percent of the population as a whole has high blood pressure. This is not something that we should ignore in terms of focus, whether it be a health education program or giving people resources about what they can do to improve.

Smoking (and the benefits of stopping) needs little discussion. Blood glucose is commonly associated with diabetes, so it important employees keep their blood sugar in a healthy range. One can have early onset diabetes and not necessarily even realize it. Early detection can really pay an important role in preventable disease. If an organization is able to reduce some (or any) of these health risks we can undoubtedly have an impact on the excess of medical claims costs.

How do you get people engaged?

It is not easy. You have to address issues and concerns around confidentiality and trust. This is not something that can be overlooked whenever you are putting a wellness program in place, because without these two things no one will engage. Quality third party health coaching programs for things such as tobacco, weight, nutrition, exercise, and stress management have proven to be effective when they are properly fitted with the organization. Having an online option, as well as self-study modules are important for those that value accessibility and/or like to self-direct themselves, or maybe simply have an aversion to asking for help from a physical presence. Onsite wellness events when delivered well can be effective, if the presenter is engaging. Lastly, wellness challenges (or “co-opetitions”) are great if the organization already has an existing competitive environment.

Best Practices When Looking at ROI

What are the most important things to do when you are looking at return on investment regarding workplace wellness? Make sure you are looking at your baseline data. Measure before you roll out any workplace wellness program if possible. We know improving health risks improve costs, but figure out the quantifiable measure important to the organization. Is it productivity and absenteeism? Is it only the excess costs on medical claims? Figure out what “success” means to the organization, then obtain as much baseline data in terms of your own individual organization (or get outside/external benchmarks if needed). Build the trust and credibility within the organization needed to measure, because that is how you are going to get quality data. If no one opts in, no data. Make sure you focus on engagement, because without engagement you are not going to be able to get change (which means no positive outcomes for the employee and organization). Finally, really focus your effort on impacting lifestyle risk factors. That means focusing on things you can influence like: making healthy choices, exercising, and (of course) smoking cessation.

The first thing we have to look at is the definition of what components constitute a workplace wellness program. Not all workplace programs are created equal. For instance, some people might consider having a newsletter, or administering a walking program, and that really is not enough for those looking at attempting to have a return on investment. Wellness programs have become a standard part of a corporation’s benefit offering. If you believe the numbers reported about workplace wellness, up to ninety percent of employers indicate that they have a wellness program.

However, what that program might be is the question, and companies should make sure that these programs being put into place are powerful enough to make an effective change. Companies need to make sure they have a way of measuring that change. Just because wellness programs are ubiquitous does not mean that they are all effective. Some of the latest survey data on workplace wellness indicates the field is make some positive strides in the right direction, but it is also clear we have a long way to go.

When you look at the rates of smoking in particular there are fewer smokers today than in the past. However, we have only moved the needle from 23 percent to just under 20 percent. It is a move in the right direction, but given all of the things that are in place in terms of cigarette regulation, premium differentials, and other things employers are doing with regard to smoking cessation… and the fact that public opinion has seemed to turn on smokers, then one might interpret the fact that we have only gotten to just under 20 percent as not that impressive. Especially when you consider that typically the excess medical costs for a smoker is about $1600.00 more per year than a non-smoker, and that smokers are admitted to the hospital twice as often as nonsmokers. These types of statistics are not surprising but important things to keep in mind none-the-less. And it’s not just medical costs that are a concern, it is absenteeism as well. On average smokers are absent typically about 50 percent more often than nonsmokers.

Smoking is Not an Employer’s Only Problem

Obesity is also a leading cause of health costs. About 65 percent of Americans are either overweight or obese. An organization might ask, how are we going to make a change regarding obesity? How can we possibly get our employee population healthy when more than half of the people in the United States are overweight? Well, studies suggest that if your employees lose just five percent of their weight (even if they would still be considered overweight) it can have a positive impact on their health in terms of better health outcomes, especially if they have a chronic condition like diabetes or cardiovascular disease. Reducing weight also generally reduces the likelihood that your employees will develop these conditions.

None of these issues are something that we should ignore and we should absolutely celebrate that workplace wellness is movement in the right direction. We have to focus on modifiable health risks. Those things we can change. We can change whether we smoke. We can change whether we eat too much, and of course we can change how we exercise.

Establish a Good Baseline

One thing to keep in mind when you are measuring wellness programs is to make sure you have a good baseline: your company’s medical claims costs, your company’s disability claims, your company’s pharmacy costs, other related costs, etc. Baselines are going to help you have more accurate measurements of the impact of your wellness program. Also, one of the challenges of measuring return on investment is whether you want to look at the specific group it is effecting, or look at your entire employee base. You need to engage your employees to change them, but some programs are good at making an existing group better, some are good at engaging new participants, and some are good at both. However, if you do not set up your measures knowing exactly what question(s) you are trying to answer, the positive relationship between the wellness program component that you’re putting in place and the changes in the baseline measures you are looking could be improperly skewed and muddy the narrative.

Return on Investment vs. Value of Investment (ROI vs. VOI)

Some argue this is just an acronym change, or smoke-and-mirrors from the wellness industry. When examined in the context of workplace wellness programs traditionally ROI focused mostly on medical claim cost savings. In recent years analysts have been expanding the definition to now look at things like participation, engagement, absenteeism, and productivity. Since corporate wellness tends to be more focused on savings than a “return,” other areas positively impacted by corporate wellness programs are now being measured and that’s why we have seen the evolution of the value of investment.

So What Are You Really Getting Out of Your Wellness Program?

How is corporate wellness positively impacting your bottom line? That is really what this concept of ROI is meant to measure. However, you really should look at both of these terms – ROI and VOI – if what you are looking to measure is impact. You are spending money. You expending effort on wellness programs. What are you getting out of it as an organization? For instance, for some companies retention is an incredibly important factor, particularly for industries in the very competitive markets. Also, workplace wellness programs are now generally seen as kind of a standard part of any organization’s benefit package. There is something to be said about making sure you have a workplace wellness program in place so that you can be an employer of choice with a rich and robust benefits offering.

There are bottom line costs that organizations must incur when they have employees who are not optimally healthy. As companies, we care about the people who work for us, and as employees ourselves we are all on a journey to obtain more optimal health and reduce the risk factors that we all carry around. Some of these risk factors are things that we can change, and that’s why we call them modifiable risk factors. It is the benefit of interventions that effect these risk factors where an organization can look at traditional ROI measurements to see if the intervention resulted in lower benefits costs.

Earlier this year I wrote an article for the CCD News Update about how the Affordable Care Act is affecting the health club industry. The article summarized how new incentives and public policy changes put forth through health care reform are opening up great new possibilities for health club operators who want to boost membership and improve their club’s bottom line. The simple truth is as the cost of health care goes up, employers that self-insure are bearing most of the burden. Many have turned to wellness programs and employee incentives as a way to lower their costs and encourage their employees to stay (or get) healthy.

We are also now seeing doctors and allied health professionals start to work more closely with health clubs as a way to encourage their patients to make positive changes in their lives. Overall there’s an increasing trend toward prescriptive wellness — and this positive trend, and the opportunities that come with it will undoubtedly continue to increase in the coming years. As an extension of my prior article, this quarter we take a little closer look at examples of how clubs in California are benefiting from this rising tide in the hope of fostering ways your club might be able to benefit too.

Health Care Reform and Health Clubs

So where does your health club fit into this changing landscape? In the first article, I highlighted that the Affordable Care Act (ACA) includes provisions addressing two kinds of wellness programs: participatory programs and health-contingent programs. Participatory programs can potentially subsidize the costs of a club membership across an entire employee base. Health-contingent programs, on the other hand, require participants to meet specific health-related criteria. An example of this type of program in California is California WorksWell (for more information visit: http://www.calhr.ca.gov/employees/Pages/wellness.aspx) , which provides state employees with discounted memberships at health clubs across the state through a partnership with GlobalFit, as well as free guest passes at partnered health clubs. It is no secret that major corporations in California are increasingly offering wellness discounts for its members. If you are club operator on the MINDBODY platform it may behoove you to learn more about their Exchange program (for more information visit: https://www.mindbodyonline.com/exchange/get-listed).

Focusing on Health-Contingent Wellness Programs

Among health-contingent wellness programs are physician-referred exercise programs (PREPs). These programs have several potential benefits. First, physicians are an often-untapped source of prospects. Doctors and allied health professionals are increasingly encouraging their patients to get more active (reference: http://www.cdc.gov/nchs/data/databriefs/db86.htm). Second, if you convert these referrals they are generally more likely to be intrinsically motivated, couple this “drive” with effective economic incentives from their employers, and the data supports that your are likely to retain these members for longer than your general member based (for the supporting data visit, click here).

Finally, these programs can also benefit your staff by reconnecting them with a higher purpose. With PREPs, the goal isn’t just selling memberships – it is about helping people change their lives for the better. For general managers worried about employee morale, reminding your staff about the positive change they create every day is a great way to get them reengaged your club’s “why”.

If you want to try to use PREPs as a way to improve membership, try these tips for connecting with the medical community:

Make friends with the office staff of local medical centers

Host an event for medical professionals at your health club or find other creative ways to encourage them to visit your club

Attend events you know will attract medical professionals and network

Hire a liaison to help you make connections with physicians

Have a knowledgeable staff member provide guest content for a local medical website and negotiate some sort of reciprocity agreement

Boost Business by Targeting Key Demographics

You can also boost your club’s business by targeting underserved demographics. For example, SilverSneakers (http://www.silversneakers.com) is a nationwide program available through various health care providers, including Medicare, that encourage senior citizens to focus on their health. It empowers them to get fit by providing free memberships for seniors. And the market holds plenty of potential for this segment. Consider these statistics:

People 55 and over control more than 75 percent of America’s wealth

Baby boomers, the people born between 1946 and 1964, spend more than any other generation — $400 billion more each year — on goods and services

By offering special programming targeting this group you can draw in an otherwise underserved demographic. SilverSneakers provides compensation to health clubs based on participation, along with additional opportunities for revenue from supplemental programs. You also get access to program and marketing support, free class equipment, and free training to better serve your members. You can attract SilverSneakers members by emphasizing benefits such as fewer hospital admissions and lower medical care costs.

It is important to note that these opportunities transcend the baby boomers demographic. The ACA also needs low-risk populations to buy health care coverage from their exchange. Covered California, the state’s health care exchange, is awarding millions of dollars in grants for outreach programs that educate young adults about the benefits of health and encourage them to enroll.

More to Come

There are many more ways health clubs can use health care reform to their advantage. If you are willing to deal with the often-complex regulations of HIPAA, you can collaborate with employers to offer health screenings and track biometric data. This biometric data can be used by employers to offer discounts on health care premiums. There are California startups like Jiff (http://www.jiff.com) that you can partner with to make it easier to offer these type of services at scale.

Furthermore, in 2018, health insurance benefits exceeding a certain threshold ($10,200 for individuals and $27,500 for families) will be subject to a 40 percent excise tax. High-end employers will start looking to wellness programs to help further reduce their costs and alleviate this particular burden. Given this segment has significant disposable income it could be an advantageous group to target if your club is properly set up to cater to a high-end demographic.